BRADENTON — A clean energy program approved by Gov. Charlie Crist is intended to help property owners finance alternative energy improvements while boosting business for solar energy companies.
However, not all local municipalities or counties are ready to participate in the Property Assessed Clean Energy program — a key factor in making the program available locally.
The PACE program, passed under House Bill 7179 on June 1, allows homeowners and businesses to finance installation costs for energy retrofits such as solar panels — which can range from $8,000 to $30,000 — through their property tax bills.
Instead of the property owner paying the upfront costs, local government uses financing such as bonds, general funds or grants to pay for the retrofit costs upfront. In return, the property owners repay the government by having the cost added as a special assessment to their property tax bills over a 15- to 20-year period.
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“That would be a heck of a boost for manufacturers of solar panels,” said Sen. Mike Bennett, R-Bradenton, who sponsored the bill. “It may be the biggest boom that we’ve done yet. We have to figure out ways to control our cost of energy and this is one of them.”
But so far Sarasota County is the only local government taking steps to possibly adopt the program.
City of Sarasota officials said they are not considering the program at this time, and the city of Bradenton and Manatee County are starting to research the details.
Today, the Sarasota County Commission will discuss the PACE program during its regular meeting and decide whether to go ahead with writing an ordinance for the program.
As Sarasota County has explored the possibility of opting into the program, staff has studied five municipalities nationwide that have participated in PACE to see the financial obligations required.
According to its study of three California municipalities, Boulder, Colo., and Babylon, N.Y., the municipalities’ financing requirements ranged from $1.5 million to $100 million to fund property owners’ retrofits ranging in cost from $8,700 to $30,000.
Lee Hayes Byron, sustainability manager for Sarasota County, said there are concerns given the financial responsibility, however the county has applied for a $800,000 grant with the state that would help jumpstart the program if the county participates.
“It’s a big responsibility, it’s a big risk but if the commission gives permission for us to move forward we would do so in a way that minimizes those risks and finds the greatest opportunity to participate,” Byron said. “The PACE program is a good model for economic development and it’s really seen as a jobs opportunity in the construction industry that’s been hit the hardest.”
Manatee County Financial Manager Jim Seuffert said the county is in the process of learning about the program but the financing requirements are complicated.
Local government would have to fund the PACE program by selling special assessment bonds to investors.
“There’s a lot of special assessment bonds in the marketplace right now that are not doing well,” Seuffert said. “The other thing that complicates matters is there’s an awful lot of property that already have huge amounts of debt placed upon them.”
Because the PACE program essentially places a lien on property, Seuffert said that is a concern at a time when many homeowners are already upside down on their mortgages.
“The intention of the whole thing is very good, it gives a way to finance some improvements but there’s a lot of complexities,” Seuffert said.
Bradenton, too, is in the preliminary stage of learning about the program.
“The city has just recently started looking into this to see if it may be of benefit to our citizens,” said Tim McCann, public information officer for the city of Bradenton. “We’re researching to see where and how it has been used to see if it’s applicable here.”
Fannie Mae and Freddie Mac also have expressed concern regarding the program. Last month, the government-backed mortgage giants released new lending guidelines that indicated that they won’t take on loans with PACE liens.
“If that’s the case that will pretty much kill this program before it gets off the ground because they are responsible for an overwhelming majority of mortgages,” said Dale Gulden, chief executive officer of Solar Direct, based in Bradenton. “In terms of its potential, it’s a very sustainable program, it’s certainly viable economically if it can work.”
Other solar energy businesses feel the same about the program.
“We think the PACE program is a great program, but it’s got to be funded by the municipalities,” said Joe Bolognese, president of Florida Solar Power Group in Sarasota. “Unless these bonds are funded it doesn’t do anything.”
Florida Solar Power Group has 10 clients who are interested in using PACE financing to pay for solar energy improvements should Sarasota County participate, Bolognese said.
“They are very interested in going with PACE funding, No. 1 because it’s no money out of pocket,” Bolognese said. “This has potential to stimulate the solar industry to the point that we get some growth here. The growth (in solar energy) has been phenomenal in other states but in Florida it seems to be at a standstill.”
Rep. Keith Fitzgerald, D-Sarasota, said investments and incentives for alternative energy should be a priority for state lawmakers.
“This state should be a leader nationally and internationally in alternative energy,” said Fitzgerald, who also attended last week's manufacturing association meeting. “This undoubtedly is going to be a growth area in the economy. We need to have people investing in alternative energy now even though the price is higher than conventional sources.”
Peter Laughlin, chief executive officer for Eco Technologies in Sarasota, said the PACE bond gives business owners and homeowners the ability to invest in solar energy.
“It would create, immediately, a funding source to allow people to be able to purchase solar energy,” Laughlin said. “What it would do for the businesses is increase the business that is available out there and it would certainly have a very drastic affect in creating jobs in our participating areas.”